Property owners in Edinburgh are avoiding more than £10 million in tax each year, according to research from Green MSP Andy Wightman.

Mr Wightman, MSP for Lothian, said he has been “inundated” with letters from constituents raising concerns about the number of private homes being let out as holiday accommodation and the impact this is having on local housing supply and anti-social behaviour.

The MSP has published research to coincide with the start of the festival season in Edinburgh, which sees the capital's population almost double in August.

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Mr Wightman's research highlights tax rules on properties let for more than 140 days a year, which become liable for non-domestic rates rather than council tax.

He estimates of the 2,500 properties advertised for commercial letting available for more than 140 days a year across Edinburgh, around 1,250 are not paying non-domestic rates.

Mr Wightman said his analysis also includes the impact of the Government's Small Business Bonus Scheme, which exempts properties from business rates if they have a rateable value of less than £15,000.

His research suggests 83 per cent of short-term lets in Edinburgh which are declared for non-domestic rates have a rateable value below £15,000, and overall calculates the combined lost revenue at £10.6 million.

Mr Wightman said: “It is disappointing that the Scottish Government has not conducted an economic impact assessment of the Small Business Bonus Scheme in the 10 years of its existence. “There is no justification for short-term lets being exempted from paying £10.6 million in taxes to help meet the considerable costs of public services in Edinburgh. “Thanks to this scheme and the failure to declare properties as short-term lets, landlords, many of whom are overseas investors, profit from these services without contributing a penny.

“It is time to bring short-term lets under fully into the planning system and give the council the powers to protect the availability of residential accommodation for the citizens of the city.”

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A Scottish Government spokeswoman said: “Since its introduction, the Small Business Bonus Scheme has saved businesses around £1.3 billion.

“We are aware of the position regarding holiday lets and have published research on the supply and demand for short-term lets. The research was commissioned to inform the work of our expert advisory panel on the collaborative economy, who are due to report to ministers by the end of the year.

“The Barclay review of non-domestic rates will report this month and we have committed to respond swiftly.”